Financial pressures drive exaggerated retirement expectations

Yasmine Raso

Senior Journalist

16 June 2026

Mounting cost of living and housing affordability pressures have skewed Australians’ outlooks on retirement and led to ‘exaggerated’ expectations that more than $1 million in superannuation savings is required to comfortably retire, according to a new poll conducted by the Association of Superannuation Funds of Australia (ASFA).

That is the belief of 42 per cent of survey respondents, which comes in well above the latest ASFA Retirement Standard benchmark last updated for the March quarter of $730,000 for a couple and $630,000 for individuals.

This figure jumps to 51 per cent when the survey results are filtered down to include just the youngest cohort, 25 to 34-year-olds, with 23 per cent also of the belief they will need more than $2 million in super to have a comfortable retirement. The 35 to 49-year-olds also shared a similar sentiment at 52 per cent betting on $1 million and 22 per cent for $2 million.

While the association noted that the ongoing housing affordability crisis was likely to have affected the outlook of younger Australians, as many signalled they expect to still be renting or paying off a mortgage in retirement, the elder age cohorts reported more realistic expectations.

Approximately 40 per cent of 50 to 64-year-olds agreed that more than $1 million would be required to fund their retirement, but this figure dropped to 29 per cent among those aged over 65. Only 11 per cent and 8 per cent of the respective cohorts tipped $2 million as the funds required to retire comfortably.

“Inflation is changing how Australians think about their financial futures. When households really feel the pressure of grocery, petrol, energy and other bills keep climbing, people naturally assume that retirement will cost a fortune,” ASFA chief executive, Mary Delahunty, said.

“But the reality is that retirement generally costs less than working life. Retirees pay no tax on superannuation pension income after 60, most own their home outright, work-related costs disappear, and concessions reduce the price of energy, medicines, transport and council rates.

“For a long time, the assumption was that you would own your home by the time you retired. For many younger Australians, that feels like a much less attainable reality.

“House prices have diverged significantly from wages over the last two decades, and many people now expect to carry rent or mortgage payments into retirement. It makes sense that they believe they will need much more in super than earlier generations did.

“Homeownership is an important aspect of dignity in retirement, alongside the financial security that comes from retirement savings. Addressing the housing affordability crisis, so that we start improving access to homeownership for younger generations of Australians, is a crucial public policy goal.”

ASFA’s Retirement Standard budgets for the March quarter indicated that homeowners aged 65 and over need $78,566 a year to retire comfortably as a couple and $55,923 as a single, rising by 1.5 per cent and two per cent respectively from the previous quarter. Over the same period, overall CPI increased by 1.5 per cent.